Privatization is not just for conservatives any longer. The basic concept of finding out whether a private-sector company can perform a public service more cheaply and efficiently than government workers has been embraced by many liberals, including the mayors of Chicago and New York and a long list of other cities.
That hasn’t made everyone happy. In recent months, liberal bloggers have argued that it’s a myth that big cities are still bastions of progressive policies, because so many Democratic mayors have gone down the corporatist path.
There’s no question that cities are feeling the pinch and need to save money, says David Sirota, an author and talk radio host in Denver. But privatization, he argues, just isn’t the way. “Saving doesn’t mean corporatizing; it doesn’t mean privatizating,” Sirota says. “But it is a way to create a revolving loop of money going out of the city and into the contracting community, and money from that community going into the political process.”
Complaints about cronyism and sweetheart deals are nothing new to privatization debates. Often, of course, there are excesses. But Leonard Gilroy, director of government reform at the libertarian-leaning Reason Foundation, says that competitive contracting and the like can save major dollars for cities. “What we’re seeing are leaders coming into an executive office, having to make real decisions based on the mathematics of a puzzling budget environment,” he says.
Privatization doesn’t mean the public sector washes its hands of a project or service, Gilroy says. It should be akin to a marriage license, where the relationship continues long after the contract has been signed. The key is for government managers to be clear about their goals up front, and then stay on top of contractor performance.
Given fiscal constraints on cities, even that is getting tougher for government workers to do. Cities are becoming so short-handed, some struggle to keep tabs on the work that they’ve contracted out.
In Denver, the Public Works Department has only four project managers left -- down from 15 a decade ago. The number of projects they oversee, meanwhile, has gone up. The result, according to a scathing report from Denver’s auditor, is that contractors are able to take advantage, and continually raise their fees by blizzarding city managers with contract change requests.
“Right now, this city, as most governments around the country are, is very short-handed,” says Denis Berckefeldt, spokesman for Auditor Dennis Gallagher. “Public Works is not doing a very good job keeping track of what’s going on, particularly with change orders. We believe the process is extremely flawed.”